When a tunnel boring machine (TBM) excavates in the mudstone layer, the slacking mudstone will be formed under the action of the disc cutter due to the argillization effect. Therefore, the cutter wear mechanism differs significantly from that in the hard rock layer, and the hazard of flat wear increases rapidly. To predict the cutter wear in the mudstone, a novel prediction model based on the “mixture lubrication-cavity expansion” theory is established in the present study, which takes the argillization effect into consideration. Initially, the cutter wear mechanism in the mudstone was revealed by the mixture lubrication theory. Then a modified cavity expansion model was proposed and the thickness of the slacking mudstone in the rock was determined. Subsequently, according to the force acting on the disc cutter, the motion of disc cutter during the rock breakage process, and the critical condition for flat wear, formulas for the normal and flat wear of a disc cutter considering the argillization effect were derived. Finally, the proposed model was employed to predict the wear loss of a disc cutter in a tunnel project in Chongqing. The effectiveness of the proposed model was verified. It was found that the force acting on the disc cutter is borne by the slacking mudstone and the cutter simultaneously. In the modified cavity expansion model, the zone of the rock beneath the cutter is divided into the core zone (0 ≤ r ≤ T/2), argillization zone (T/2 ≤ r ≤ ra), plastic zone (ra ≤ r ≤ rp), and elastic zone (r ≥ rp). The stress caused by the cutter is equal to the stress at the argillization zone. The argillization effect can reduce the wear loss to some extent due to the mixture lubrication, however, it aggravates the risk of flat wear. This study will enrich the understanding of the cutter wear mechanism during the tunneling. Furthermore, it will provide some references for the design of the TBM and the scheme of the tunneling project.